Uf Study Forecasts Moderate Growth, But Public Doesn`t

A new forecast saying Florida`s economic growth will moderate in 1985 apparently is a surprise to many Floridians -- who believe the economy will continue to improve.

In November, 70.5 percent of the consumers surveyed by the University of Florida said they expect the state`s business conditions to improve over last year. Only 9.2 percent said they expect business conditions to worsen.

Feldstein But a forecast released last week by UF economists concludes ``Florida`s economic growth rate is expected to moderate significantly over the booming pace of late 1983 and 1984.``

``Don`t people know that Florida`s economic growth is slowing?`` asked Carol Taylor, a UF professor who supervised the consumer survey.

Taylor said the optimistic outlook by consumers might have been attributed to ``election euphoria.`` UF hasn`t yet compiled results from the December consumer survey.

Nonetheless, Taylor said consumer expectations were crucial, because they largely determine the direction of the economy.

The conflict between what economists think they know and what consumers think they know about the economy isn`t new. Martin Feldstein, former economic advisor to President Reagan, emphasized the disparity at an economic seminar in Tampa last week.

Feldstein joked that being an economist no longer is a sufficient qualification for making economic forecasts.

The annual event is sponsored by the Florida Council of 100, a group of businessmen from the state`s largest companies. They paid more than $200 each to attend the conference featuring state and national forecasts.

(BU) Florida`s unemployment rate will rise from 6.4 percent in 1984 to 7 percent in 1985, 7.1 percent in 1986, and 6.9 percent in 1987.

(BU) Population will grow from 10.9 million in 1984 to 11.3 million in 1985, to 11.5 million in 1986, to 11.9 million in 1987.

(BU) Housing starts will fall 5 percent from 178,500 units in 1984 to 169,600 in 1985. The study predicts that 174,600 housing units will be built in 1986, and 182,300 units will be built in 1987.

(BU) The number of tourists visiting Florida will climb from 39.7 million in 1984 to 40.8 million in 1985, 41.9 million in 1986 and 43.4 million in 1984.

Total expenditures on tourism will rise from $22.4 billion in 1984, to $24.4 million in 1985, $25.9 million in 1986 and$27.7 million in 1987.

``While the forecast shows the economy moderating in 1985, it does not show it plummeting,`` the forecast said. ``Projected declines in construction employment and increases in the unemployment rate are far less than if the state were expected to repeat historical patterns of construction recessions.``

On a national level, Florida consumers appeared more pessimistic about the U.S. economy than economists attending the one-day conference.

Roger Briner, director of DRI U.S. Economic Service of Washington, D.C., was a featured speaker on the national economy. He works for Otto Eckstein, a well-known economist who is chairman of DRI.

Among DRI`s predictions on the national economic outlook:

(BU) Inflation, as measured by the Consumer Price Index, will fall from 4.3 percent in 1984 to 3.8 percent in 1985. But the economists forecast the CPI will rise to 4.4 percent in 1986 and 4.8 percent in 1987.

(BU) The prime rate will fall from 12.05 percent in 1984 to 10.11 percent in 1985 and to 11.55 percent in 1986. But it will rise to 13.18 percent in 1977.

(BU) Unemployment will stay at 7.4 percent in 1985 as it did in 1984. But it will rise to 7.5 percent in 1986, and fall to 7.3 percent in 1987.